The U.K. remains by far the biggest single market in Europe, but the rest of Europe has been gradually catching up in the past few years except in 2008, when the economic crisis hit the sector hard in certain countries such as Ireland, Spain and Russia.
Using a relatively broad definition of the market, sales of golf clothing declined by an estimated 5 percent in Europe in 2008, with a 4 percent drop outside the U.K. to a total of €486 million at retail – a level that is much higher than previously estimated - based on the findings of a major research project conducted by Sporting Goods Intelligence Europe over the past year (details on page 3 of this issue). Using a narrower definition of the core market, it was still worth an estimated €379 million.
The corresponding average expenditure per registered golfer comes down to €119 or €152 per year, depending on the definition of golf clothing. The difference in the numbers between registered players and effective players is big in several markets, however.
There will also be a decline this year, but it is bound to be temporary. There is tremendous scope for expansion in most of the markets outside the U.K., where golf participation has been growing everywhere except in Sweden and Norway, leading brands such as Colmar and Geox to enter a segment that is clearly more promising than many other sports categories for a variety of reasons.
Participation levels are still lagging way behind the U.K. or the U.S. in most European countries, golf tourism is developing in many parts of southern Europe, and the golf apparel market is becoming more sophisticated and more segmented, offering opportunities for all kinds of brands.
Some brands such as Peak Performance have managed to turn golf into a fashion statement even in countries where golf-specific clothing is not always worn on the golf courses.
The nature of the golf apparel market differs considerably from one country to the other, and this has a considerable effect on the average spending per registered golfer. The main variables are the following:
· The proportion of inbound and outbound tourism
· The socio-economic make-up of the golfing population in the country
- High or low spending power
- Golf as a statement of social status or as a people’s game accessible to all
· The presence of registered and unregistered golfers in the country
· The proportion of passive players (in some countries it can be as high as 30-40% of the registered players)
· The dress code and the dress habits on the golf course (formal or informal)
· The relative importance of the corporate market (also known as the profile market)
Based on these variables, we have divided the European golf market into four types:
· Countries with a high level of inbound golf tourism
· Countries with a strong indigenous base of golfers that are also tourist destinations
· Countries with a relatively low level of inbound golf tourism where the dress code is important
· Countries with a relatively low level of inbound golf tourism where the dress code is not important
It is interesting to see how the average spending on golf clothing per registered golfer changes and other variables change from one type of market to the other.
In the countries where the impact of tourism is high, the size of the golf apparel market obviously depends more on the number of golf courses in the country than on the number of registered players. It is highest in Portugal, in spite of a relatively low number of registered players (especially in comparison with Spain) because of the relatively high number of golf courses available in the country.
This unique report of about 1,500 pages, divided into three volumes, analyzes the golf market in detail in 33 European countries plus Morocco and South Africa. We have been able to offer it at a relatively affordable price for any company operating in the sector or considering an entry thanks to a grant by the British Golf Industry Association.
Our study covers golf shoes as well. We have found that the total size of the European market for golf shoes outside the U.K. amounts to about 1,050,000 pairs per year, which would be equivalent to 0.32 pairs per registered golfer. Assuming an average price per pair of about €115 after VAT and after mark-downs, this means a total value of around €120 million after VAT.
The estimates for the British golf apparel and footwear markets have yet to be validated through further research that will be conducted over the next few weeks.
In another set of countries, which we call “hybrid,’ the size of the apparel market is influenced by tourism and by the number of golf courses as well as the number of registered players. Spain, Ireland and France are among them.
About half of the total golf apparel market outside the U.K. consists of countries where the impact of golf tourism is relatively low and golf participation is relatively high. In these countries, what matters the most to determine the average expenditure per golfer is not so much the GDP per capita or the average general spending on sporting goods in the country, but rather the dress code on the golf course.
The differences are striking and the reasons are both cultural and historical. Roughly speaking, the two attitudes are most pronounced in specific regions, although there are some courses in each of them where one of two attitudes prevails. The formal mindset is typical of Italy, the German-speaking countries and Eastern Europe. Instead, the Nordic countries and the Netherlands have a more relaxed and more democratic attitude toward golf, translating into a relatively lower spend per capita, although the golfers are generally wealthy. They prefer to spend their money to go to play abroad where it’s warmer, and they often make some purchases there.
As in our country reports on the total sporting goods market, we have closely analyzed the supply chain in the market for golf clothing and footwear. Here are only some of the general conclusions that we have reached at the retail level, while discussing all the major players in each market:
Specialty golf retailers want to offer more apparel because they get better margins and can make the difference with the low-priced hardware offerings of internet providers.
Pro shops continue to dominate the golf apparel and footwear market, largely because the golf market is a small portion of the total sporting goods market in most European countries, and in most of them these on-course stores tend to carry more apparel than other types of retailers.
Off-course specialist retailers are gaining market share, as shown by the expansionary policies of major players such as Golf ‘Us from Italy, McGuirks from Ireland, Golf Plus from France and Dormy from Sweden (these major players and many others are profiles in the report).
International multi-sport retailers with large megastores are more and more willing to carry a well-stocked golf department, and some of them are also expanding their presence in the golf market. Examples include Décathlon from France, Stadium from Sweden, XXL Sport from Norway and buying groups in certain countries such as Finland and Norway, where they have a dominant market position.
Pro shops are turning to buying groups such as Golfstore from Sweden or specialists such as Golf ‘Us from Italy, or to the likes of Golfy in France and EurPro in Ireland, to obtain more buying power, more favorable conditions, merchandising expertise and marketing support.
American franchisors have created a revolution in emerging markets (Golf USA in some Eastern European markets, for example), but aside from a few exceptions (such as Nevada Bob’s in Portugal), they have had trouble developing smooth processes and adapting to the diversity of the European markets.
Retailers generally prefer to work closely with fewer suppliers for reasons of space, inventories and terms of trade.
And here are some of the observations that we can make regarding the wholesale stage of the supply chain:
The market is consolidating around some major players that have more than one brand such as Acushnet, TaylorMade-Adidas Golf (acquisition of Ashworth) and Premium Golf Brands.
Business models are more and more tailored to obtaining leaner inventories.
Taking advantage of the free circulation of goods in the European Union, some brands are managing an increasing portion of the distribution through regional deals, involving for example the U.K. and Ireland, the whole Iberian Peninsula, Germany and Austria, various countries in Eastern Europe, and various Nordic countries. They are doing this in many different ways that frequently depend on the competences of the individuals involved in the supply chain.
Some other brands are doing the opposite to better respond to the peculiarities of markets that are different from each other, using dedicated agents in each country. They are doing this in the Benelux countries, for instance, instead of giving the region to a Dutch company and then finding that it does nothing in Belgium. The same goes in some cases for the Republic of Ireland when this is part of a U.K. deal.
Many brands are handling pro shops through agents and off-course retailers directly as key accounts or through different distribution partners who can exert some leverage with them because of the wide range of collections that they represent.
In any case, because of the increasing sophistication and segmentation of the market, the human element is more than ever the key in the trade, justifying in many cases the territory of the contract and the use of an agent, a distributor, a sales employee or a joint venture.
